Labor Backs Chalmers as Rate Hike Lifts Cash Rate

Ministers defended the Treasurer after reports of internal criticism, as the Reserve Bank lifted the official cash rate to 4.85 per cent.

Updated on Nov. 10, 2026 in Economic Policy

Labor Backs Chalmers as Rate Hike Lifts Cash Rate

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Labor ministers publicly backed Treasurer Jim Chalmers after reports that people inside the party had criticised him to journalists, without naming any critics. The Reserve Bank raised interest rates for the fifth time this year, taking the official cash rate to 4.85 per cent, the highest level since 2008.

Why it matters

The rate rise increases borrowing costs across the economy as the Reserve Bank works to reduce spending and bring inflation down. The Bank says inflation remains too high and may stay elevated for longer than expected.

The official cash rate is 4.85 per cent, the highest since 2008, after five increases this year, according to the Reserve Bank. The Bank's inflation target is two to three per cent, and it has not said when inflation will reach that range.

The players

Jim Chalmers

Jim Chalmers is the Australian Treasurer and a senior Labor minister responsible for the federal budget and economic policy.

Qantas

Qantas is Australia's largest airline and the national flag carrier, which is updating its ageing computer systems.

Reserve Bank of Australia

The Reserve Bank of Australia is the country's central bank, responsible for monetary policy and setting the official cash rate.

The details

Assistant Treasurer Daniel Mulino said Jim Chalmers is safe in his job and has full support, while Environment Minister Murray Watt said the comments should stop. Separately, Qantas plans to cut about 850 Australian jobs over the coming years, with some work moving to Accenture staff, mostly in India.

This year: the Reserve Bank raised rates for the fifth time.
2008: the last time interest rates were this high.
Middle of 2027: first expected Qantas job changes.

Macro View

The current cash rate of 4.85 per cent is the highest since 2008, reflecting the Reserve Bank's effort to pull inflation back into its two to three per cent target band. The tightening cycle echoes the 2022-2023 rate increases, though the Bank now faces inflation that has proven more persistent than expected.

Households with variable-rate mortgages and loans will face higher repayments following the rate increase. The Reserve Bank's tightening adds pressure to household budgets already stretched by the cost of living.

The takeaway

Households should review their budgets and loan repayments as borrowing costs rise. Watching the Reserve Bank's future decisions will show whether inflation is returning to its target range.